Did I Price My Product Wrong?

Did I Price My Product Wrong?

Product Price RightThe short answer: Probably not. Price only matters as only a part of the equation.

The key is not to let your buyers focus on price. Keep them focused on the benefits and value of the product, and build excitement. Done well, your buyer won’t be concerned about the dollar amount. The perceived value is the most important part of the equation.

Conveying quality matters

Pricing definitely needs to accurately reflect the quality of your product. Most importantly, you must convey the value to your prospects in your presentation or sales letter.

  • What problem are you solving for the customer?
  • What’s in it for me? Your buyer will always think about that. Answer it.
  • What objections might come up that you can overcome upfront?
  • What are the emotional, psychological and/or physical benefits?

The more value you relay to the potential buyer, the more they will rationalize the price for themselves. And then always over deliver! Don’t forget follow up after the sale.

Determining the Price

Let’s use digital information products as an example because prices are largely determined by the product owner. You don’t have that freedom with a book on the shelf at a major retailer. Print books have to make enough to pay the author, editor, printing, marketing, publisher profit, plus a cut for the retailer.

Information products only pay the owner and affiliate sales. There’s no inventory to store, no big upfront costs and if it doesn’t sell, you can just transfer it to an archive file or hit the delete key. When you consider all of those factors, the seller has the freedom to set the prices — with one exception.

What will the market pay?

To continue with our example: Ebooks are well established in every genre from textbooks to popular topics so the price is dependent on the market and the following of the author.  Let’s say you’re just getting started and you don’t have that major following yet.

Survey the prices on comparable information products on at least a dozen sites or vendors. Is your price comparable? That’s a good start.

Pricing Psychology

Have you noticed that many information product prices end in “7?” Popular pricing is $17, $27, $47, $97 and so on. That price seems to click with most buyers.

Other frequently used price points are $9.95, $19.95, $39.95, etc. The “.95” is borrowing a retailer’s trick of making the price sound less than it really is.

After all, $19.95 isn’t a full twenty bucks since buyers tend to ignore the impact of retail tax or shipping. With information products delivered electronically, the $19.95 is the true price, leaving a big nickel for whatever a nickel still buys.

It’s not the nickel – it the psychological satisfaction of spending less than twenty dollars. The $17 products have the same appeal of spending less than twenty dollars.

Look for the middle ground in pricing.

Avoid prices that are too low because the value of your product won’t seem worthwhile. Even if you start slightly higher than comparables, you have room for a price reduction or a “special offer” at the next lowest price point.

It’s about letting the buyer win.

Your thoughts?

Do you have other pricing questions? Perhaps some experienced tips to offer? Join in the conversation!

  • Rick Cooper
    Posted at 17:59h, 13 June Reply

    Great tips on pricing. And the best price of all, especially for lead generation, is FREE! Consider prices of products offered by your competitors and develop a plan for discounting and special offers. I think you could do a whole webinar just on pricing Loral.

  • Karin Hanna
    Posted at 00:56h, 14 June Reply

    Value first, Value second, Value Third. I totally agree with Loral, when a potential customer is sold in advance because you delivered great Value in the form of a Solution to their problem, then made it easy for them to say YEs and over deliver. A no from a potential customer is rarely about price, its usually about lack of trust or lack of perceived value..when you stack the value and benefits and package it up to be Irresistable Price is never a problem.

  • Sandra McFadin
    Posted at 18:35h, 15 June Reply

    As a small side business I make and sell handmade greeting cards. The art galleries and boutiques that sell my cards price at $6.99 or $6.95 although a few tried an even dollar amount of $7.00 and they did not move as well. Interesting how the psychological aspect of a few cents can affect a buyer. Cards offered “on sale” marked down from $10 to $6.99 moved faster…people love getting a deal. Even at those retail prices my own profit is very low due to the cost of high end materials and labor that goes into making one of my collage cards…I guess that is why I keep it as a “small” side business! Mostly a hobby & for fun!

  • Hypnobambie
    Posted at 19:52h, 01 September Reply

    Letting the buyer win is a remarkable concept…thank you.

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